The Consumer Financial Protection Bureau announced Tuesday that it was suing Capital One for misleading consumers about their savings account interest rates and “cheating” them out of more than $2 billion in interest.
The agency said in a statement Capital One deceived holders of its “360 Savings” account by conflating it with its newer and higher-yield savings account option, the “360 Performance Savings” account. The bank allegedly failed to notify 360 Savings account holders of the newer option and marketed the two products similarly to lead customers to believe they were the same.
However, the interest rates of the two options were substantially different, according to the CFPB. Capital One increased the 360 Performance Savings interest rate from 0.4% in April 2022 to 4.35% in January 2024, while it lowered and then froze the 360 Savings rate at 0.3% between late 2019 and mid-2024, the agency said.
Despite its relatively low interest rate, the CFPB alleged, the 360 Savings account was advertised as a high-interest savings account. The bureau said Capital One aimed to keep 360 Savings users in the dark about the higher-yield option by replacing all references to the account with the similarly named 360 Performance Savings option on its website, excluding account holders from marketing campaigns advertising the higher-yield account and forbidding employees from notifying account holders about the 360 Performance Savings option.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB Director Rohit Chopra in a news release. “Banks should not be baiting people with promises they can’t live up to.”
In a statement, Capital One denied the allegations and said it transparently marketed its 360 Performance Savings account.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court,” the company said in a statement.
The bank added the 360 Performance Savings product was “marketed widely, including on national television, with the simplest and most transparent terms in the industry.”
LegitPancak3 on January 14th, 2025 at 19:54 UTC »
I originally signed up for a Capital One Savings account around 2020. Thankfully I’m very aware of my money and instantly saw that the interest rate was pitifully low, like under 0.5% per year. Was eventually able to find the Performance Savings account on the their website and opened that up and been using it ever since. I can definitely empathize with people who signed up for the wrong savings account, but I just can’t imagine not checking on it every once in a while. Other scummy things Capital One does is silently lowering the rate, often in response to the Fed lowering rates, but I’ve never once been given a notice. It went from 4.25% last year to its current 3.8% (gradually of course, not all at once) with no emails, no letters, nothing.
ExploringWidely on January 14th, 2025 at 19:39 UTC »
They only have to delay the case for another 6 days. Then the CFPB will be destroyed and this will all go away when consumers are no longer protected. If I were Capital One, I wouldn't spend more than 10 hours of lawyer time on this before then. There's zero chances of it going anywhere with the billionaires taking charge of everything.
dolt1234 on January 14th, 2025 at 19:35 UTC »
And the incoming administration wants to do away with the CFPB. Captial One spend $2,410,000 on lobbying last year, and contributed $1,810,485 to campaigns (favoring Democrats).
These companies are not afraid of us... but it's time they should be. This is an outrage. They stole $2,000,000,000 from American citizens. If corporations are people, Capital One deserves the corporate death penalty over this.
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